As the first quarter of 2021 comes to an end consumer confidence and home prices soar. The Conference Board’s March consumer confidence index realized the largest increase since April 2003. Additionally, the S&P CoreLogic Case-Shiller reported This Week in Real Estate that the home price index to start the year experienced the fastest growth in fifteen (15) years. Below are a few newsworthy events from the final days of Q1 and the first few days of April that influence our business:
U.S. consumer confidence raced in March to its highest level since the start of the COVID-19 pandemic, supporting views that economic growth will accelerate in the coming months. The Conference Board’s consumer confidence index jumped 19.3 points to a reading of 109.7 this month, the highest level since the onset of the pandemic in March 2020. The increase was the largest since April 2003. The survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, soared to a reading of 110.0 from 89.6 last month. The expectations index, based on consumers’ short-term outlook for income, business, and labor market conditions increased to 109.6 from a reading of 90.9. A separate report on Tuesday showed the S&P CoreLogic Case-Shiller 20-metro-area house price index soared 11.1% in January from a year ago, the fastest in 15 years, after increasing 10.2% in December.
Consumers Continue to See Housing as a Safe, High-Potential Investment. The single-family housing market was particularly strong in 2020. As of Q4 2020, home prices appreciated 10.8% year over year, according to the FHFA Home Price Index, and the National Association of Realtors reported that monthly sales of existing homes were more than 20% higher, year over year, in Q4 2020. As part of our Q4 2020 National Housing Survey®, seventy-five percent of respondents indicated that homes are a “safe” investment, ranking in safety just slightly below a savings/money market account. Additionally, 73% of consumers felt that investing in a home has “a lot of potential” – by comparison, 63% of consumers believe that stocks have “a lot of potential.”
First-Time Homebuyers in the U.S. Turning to New Home Construction in Greater Numbers. New data from the latest National Association of Home Builders / Wells Fargo Housing Market Index this week reveals first-time homebuyers account for almost half (43 percent) of the new home market in 2021, up from 32 percent in 2018. The average first-time buyer share has trended upward steadily since NAHB began using the current methodology to measure it in 2016. Between 2018 and 2021, the share grew strongly from 32 to 43 percent. “A growing number of first-time buyers are eager to purchase a new home, yet home prices remain a challenge,” said NAHB Chairman Chuck Fowke. Lumber prices have skyrocketed more than 180 percent since last spring, and this price spike has caused the price of an average new single-family home to increase by more than $24,000 since April 2020, according to NAHB standard estimates of lumber used to build the average home.
Did you know every home listed for sale with Berkshire Hathaway HomeServices Northwest Real Estate is eligible to receive no obligation home warranty coverage the first six months the home is listed with our company?
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